-Usually meant to protect public, people in positions of weakness, or certain industires

Capture Theory of regulation

Regulation should be for the public interest

Sometimes it serves for the interest of firms rather

-Result of strong lobbying groups associated with some industries

-Through this an industry can capture the regulators and persuade them to enact a policy that favors them (ex. set up legal barriers to entry)

Trust

shareholders of seperate firms agree to give up their stock in exchange for trust certificates that give them a share of the trusts common profits, a group of trustees then operates the trust as a monopoly, controlling output and setting price

Interstate commerce commission (ICC)

One of the landmark antitrust legislation

Regulatory group, created by congress to oversee correct abuses in railroad industry

Sherman Act

Passed by congress, declared every contract or conspiracy to restrain trade among states or nations illegal and declared any attempt at monopoly, successful or not, a misdemeanor

-Interpretation of which specific behaviors were legal fell to courts

Rule of reason

The criterion to determine whether a particular action was illegal (unreasonable) or legal (reasonable)